How I'm thinking about our house, transportation, food and waste, to minimize environmental impact, while improving quality of life and having fun.

02/02/2012

Le cheque du SREQue

SREC - solar renewable energy credit. The MA government under Deval Patrick set a goal to dramatically increase solar electric generation and jobs, and the increase has been dramatic - from under 4 MW in 2007 to 118 MW installed or in process currently. The state has used multiple tools, including tax credits and outright rebates from the MA Clean Energy Center, yet the one that will put the most green in my pocket is the SREC.

The utilities are required to have an increasing % of their generation from renewables and a portion of that from solar electricity. If they don't have it, they can purchase credits from those who do own systems producing solar kWh. Small systems like mine are pooled by aggregators (not to be confused with Republican presidential candidates, who are aggravators) who sell them into the open market quarterly at auction. The latest auction went for $540/mWh, or $0.54 per kWh (an SREC is 1,000 kWh or 1 mWh). That's almost three times what I pay for electricity from Nstar here on MV. My net after fees and such was $502 for my first SREC. My system should make 5-6 SRECs annually.

This golden goose doesn't last forever. I'm signed onto this for 40 quarters. Once the utilities hit the required targets the price will drop, but it's fairly likely that I'll be clearing over $250/SREC. So my SREC income over the next decade should be over $15,000. I should be installing solar electric systems wherever I can, it's a way better investment than any other I can make :-)

I'm not really a fan of subsidies. I wish for an economy where all subsidies are removed - if the effects of oil, gas, nuclear, etc. were accounted for, solar wouldn't need subsidies to compete. However, unlike a flat tax credit or a rebate, paying per unit of produced energy at least directs the subsidy towards lowering the cost of the technology - my motivation is to make as much energy as possible at the least cost, and that's the right form of incentive. If you live in MA, you should be putting solar electricity on your roof (or mounted on the ground) - get guaranteed dividends while cleaning up our energy supply.